While working out at the local gym the other day I was speaking with a gentleman about the real estate market. This gentleman happened to be the VP/Branch Manager of a local Suntrust Bank here in central NC. He mentioned that he was SOOOO busy lately with refinancing mortgages so I took the opportunity to pick his brain about the subject. He said, "you are essentially applying for a new loan and you MUST have at least 5% equity in your home if you expect to pay nothing at the closing." I asked about closing costs and he said they could be rolled into the new mortgage so that you could "walk away from the table clean". I said "Great! No wonder you're SOOOO busy right now!"
You would think that the majority of this loan officer's clients would be the borrowers that recieved 100% financing a few years back, but unfortunately they probably don't have the neccessary 5% equity in their homes to qualify for refinancing.
Since speaking with the VP I've actually spoken with someone who received 100% financing about three years ago on their current home. They almost have 5% equity in their home if it can appraise for the purchase price they bought it for. I ran some comps to see if they had a shot and it appears they would have a 50-50 chance of appraising. It would depend on the kind of day the appraiser was having:)
Now I need to ask the VP if they would give some slack to somebody in this situation since they can afford to pay the current mortgage , but it would greatly benefit them to save the additional $200 per month they might yield from refinancing at a much better rate.
My guess is that the borrowers would have to make up the difference of equity by bringing cash to the closing. I'll let you know what the VP says. Until then, keep on Refinancing!
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